Tea is one of the UK’s most beloved hot drinks and the beverage appears to be gaining steam across the world. Andrew Dann talks to James Wenden, Sales Director of the Welsh Brew Tea company, about the growing popularity of specialty teas in local markets and beyond
Second only to water as the world’s most popular beverage, tea is a familiar sight within homes throughout the UK and around the globe. Elsewhere tea is becoming increasingly present on the high street as well as in other specialty retail segments. Starbucks for example, continues to trial its Teavana teashop concept in the US, while tea sold in its Starbucks locations has reportedly accounted for a one per cent increase in same-store consumption at 14,000 of its units for two consecutive years. Nor is the growing popularity of tea limited to the traditional ‘hot cuppa.’ In addition to increasing presence of iced and chilled teas internationally, Absolut vodka released its Absolut Wild Tea vodka brand in 2010 and the drink continues to be a success today.
The UK tea market has proven to be consistently resilient, which is a trend that has been noted by market players around the world. In its 2011 market indicator report titled Consumer Trends – Hot Drinks in the United Kingdom, the Agriculture and Agri-Food Canada International Markets Bureau noted that the sales of hot drinks grew in the UK during 2009, despite the global economic downturn causing particularly tough trading conditions domestically. By 2015 data collected by Statista suggested that the combined UK hot drinks market had reached a value of around £2.3 billion. Within the tea market specifically, information gathered by the consumer analyst Mintel during August 2015 indicated that the market value of tea was £654 million.
Within this diverse and hotly contested market, Welsh Brew Tea has roots that date back as far as 1989 as part of a farm diversification venture in Mid- Wales. By 1993 Welsh Brew Tea was fully established as a family owned company located on the beautiful Gower peninsula in Mumbles, South Wales. Today Welsh Brew Tea is recognised as an iconic Welsh brand that has created a unique blend of African and Indian teas that are specifically blended to perfectly complement Welsh water. “The concept behind the formation of the company was to blend a tea that would complement Wales’ soft water as well as provide the Welsh consumer with a product that best suited their taste for a good traditional full flavoured yet smooth cuppa,” explains Sales Director, James Wenden. “The Welsh Brew tea brand was founded by its current Managing Director Alan Wenden, who also had his eye on the Celtic market for export and set off on the road of building what has become a truly iconic brand here in Wales. No small feat considering in those early day we would blend enough tea to fill the Volvo and hand deliver to stores across Mid-Wales. The past 25 years has seen Welsh Brew tea develop into a high quality brand that is now available in every supermarket in Wales and is also showing significant growth in the border cities of Bath, Bristol, Chester and the surrounding areas – it’s been an impressive journey since those early Volvo days!”
With the near universal popularity of a well-brewed cup of tea, it is unsurprising that UK consumers are increasingly particular about which brand they drink. According to the Mintel report, by 2011 tea consumption reached 165 million cups per day, or 60.5 billion cups per annum. Added to this are 900 million cups of fruit and herbal teas and 279 million cups of green tea consumed per annum. Interestingly however despite the position of tea as the UK’s most popular hot drink, the nation’s sales of tea have dropped by six per cent over the past five years. The report states that UK tea retail sales dropped from a peak of £699 million in 2010 to an estimated £654 million for 2015 and that it is the ‘standard’ cup of tea that has experienced a decline in popularity, while the demand for speciality teas has grown significantly. Sales of ordinary teabags that had previously dominated the market, fell by 13 per cent between 2012 and 2015, while the sale of fruit and herbal teas grew by 31 per cent from £58 million to £76 million between 2012 and 2014. During the same period the sale of specialty teas also increased, growing by 15 per cent to £63 million and sales of green teabags skyrocketed by 50 per cent to some £36 million.
The growth of brands like Welsh Brew Tea is a clear indicator that there is a strong market demand for high-quality, specialty teas that hold appeal for both local and international consumers. The success of Welsh Brew Tea shows that this potential has existed for many years and that for the companies that possessed the foresight to develop this business, their investment have paid rich dividends. “There was a huge opportunity to do something great in Wales as well as for Wales. Like the majority of the UK we here in Wales are passionate about our tea and with our wonderfully soft water we were able to blend a tea using Indian and African teas that meant we kept all the strength, colour and flavour that we enjoy so much whilst being able to maintain a consistent and smooth finish. Working closely with our tea blenders in Powys, Newtown Welsh Brew Tea was born. Alan’s history was in FMCG and blue chip companies, which gave him great insight into the market. This combined with knowledge of Wales and its people meant that Alan could see the real possibilities of a Welsh company doing great things,” James says.
“The tea consumer is a savvy one who sees the benefits of speciality brands. We are up against global giants like Tata Tea (Tetley/Teapigs), Unilever (PG) and Apeejay (Typhoo/Glengetti) to name but a few. Each of these has huge muscle in the market place, yet quality local brands are able to fight their corner with huge success. A walk down any supermarket tea aisle in Wales will prove my point with Welsh Brew holding substantial ground. With limited resources but real passion and commitment we are testament to what can be done. There is no corporate front to get beyond, just a family business doing its best for itself and its customers,” he adds. “There has never been a better time for us in the speciality beverage market. The consumer knows what they want and we can react quickly to this. With a real volume growth of 16 per cent last year in a black tea market that saw decline of eight per cent it shows what can be done if the passion and desire is there.”
Although research published by the Dutch Centre for the Promotion of Imports from developing countries (CBI) during February 2015 suggests that speciality teas are not generally stocked in supermarkets throughout the EU, companies like Welsh Brew Tea are increasingly bucking this trend and redefining the market. Presently Welsh Brew Tea is sold in retailers including Tesco, ASDA, Morrisons, Sainsbury’s, Aldi, Waitrose, Ocado, The CoOp, Cost Cutter and Spar as well as countless independents across Wales. Furthermore its internet presence has generated sales across the world, while Welsh Brew Tea enjoys a strong export relationship in Ireland and growing confidence in the US market.
The market for tea and other hot beverages is an increasingly exciting, as well as a competitive one. Further to its brand of speciality teas Welsh Brew Tea has introduced a comprehensive selection of beverages to suit all tastes that include fruit and herbal teas, coffees, malt drinks and hot chocolate. Throughout 2016 and beyond the company will continue to target further market penetration, suggesting that the future of the hot drinks market for Welsh Brew Tea and the wider industry is bright for speciality beverage providers. “We currently have about four per cent of the Welsh tea market and through innovations and diversifications we see this heading toward eight per cent. Our focus at present is on Wales, the market we know best. We are investing in marketing campaigns that see the traditional above the line spend with radio being this year’s focus,” James concludes. “Current trends see growth in the tea pod area but this we feel does not fit in with our model for quality and sustainability. New packaging however and huge potential in the vast flavoured tea sector has us constantly brain storming and looking for new opportunities.”